On Wednesday, gold prices fell as investors gradually retreated into riskier investments, hoping that the risk of the global banking crisis spreading had been temporarily contained. At $1,965.89 per ounce, spot gold was trading 0.4 percent lower. U.S. gold futures decreased 0.3 percent to $1,967.50. According to independent analyst Ross Norman, gold has dropped as “markets are moving riskon as fears of contagion inside the banking sector abate.”
The CME Fed Watch tool shows that investors are pricing in a 40.5 percent possibility of a 25-basis-point raise in May, while gold traders are still focused on the Federal Reserve’s interest rate plan. The central bank hinted last week that it was about to halt further rate increases, but Fed Chair Jerome Powell reaffirmed the Fed’s commitment to keeping inflation under control.
According to metals firm MKS PAMP, “The Fed will have to pick between higher inflation, a rougher landing, or financial instability all outcomes will keep safe havens in play.” This is likely to cause gold to retest and surpass all-time highs ($2,070/oz) this year.
Spot silver prices were down 0.2% to $23.22 per ounce, platinum prices decreased 0.3% to $960.23, while palladium prices increased 0.1% to $1,420.11.After EIA data revealed a larger-than-expected reduction in U.S. crude stockpiles, crude oil prices continue to rise. Benchmark Brent crude increased by more than $1/bbl.